Questions continue to buzz about Dr. Alan Schatzberg’s and Stanford’s claims that he complied with the university’s disclosure requirements. Dr. Schatzberg is chair of Stanford’s department of psychiatry and the founder of a company called Corcept Therapeutics. I have commented previously on the University’s (mis)management of Dr. Schatzberg’s conflict of interest vis a vis Corcept and his NIH funding.

The two most informative documents released by Stanford University are dated 23 May 2008 and 25 June 2008. The first is an amended response to Senator Charles Grassley. The second is a public statement concerning Sen. Grassley’s investigation of Dr. Schatzberg through the Senate Finance Committee.. The complete texts are available on-line here: http://ucomm.stanford.edu/news/052308conflict_of_interest.pdf (1)

“Disclosure of potential conflicts of interest at the time of any transaction,such as when the faculty member receives a research grant or gift or hasintellectual property licensed, is a critical component of our conflict ofinterest policy. Transactional disclosures of conflicts of interest are requiredwhen submitting a grant, negotiating a contract, during licensing activities,submitting protocols for human subjects research or animal research, enteringinto material transfer agreements or collaboration agreements, receiving giftsor entering into procurement activities. … Our standard for a significantfinancial interest is whether the faculty member has received $10,000 or more inincome, holds $10,000 or more in equity in equity for publicly traded companiesor has any equity if the company is privately held. This ad hoc disclosure isused to mitigate, manage or remove such specific conflicts, and, for allresearch funded by NIH, as a basis for reporting to NIH. All such conflicts arealso reported in the annual disclosure, and thus are also part of the Universityinformation on conflict of interest (emphases added) (1).

Likewise, the Stanford Daily reported that

“the University said in its letter to Grassley that it holds a “zero-dollarthreshold for disclosure.” This requires that faculty members divulge any andall financial gains made through outside interactions that could have bearing onwhat they are doing on campus.” (3)

The sale of Corcept Therapeutics stock by Dr. Schatzberg in 2005 was not reported to the University. (1) Dr. Schatzberg’s attempted sales of stock in 2002 and 2004 in connection with Corcept’s planned stock IPOs also were not reported to the University. (1) Proceeds of the 2005 sale to Dr. Schatzberg were over $109,000. Projected proceeds of the failed attempts to sell stock during the IPOs were $7-11 million. In terms of the policy described above, these must be considered “transactions” and “income” and “financial gains.” Stanford did not document compliance by Dr. Schatzberg with University policy. The stock sale is not mentioned in Dr. Schatzberg’s 2005 disclosure to the University. (1) Indeed, Stanford prevaricated on this issue by stating “…information about his stock ownership and stock sales was publicly disclosed through SEC filings and is available online through financial reporting services.” (2)

This explanation is laughable. Since when does a University rely on SEC filings and online financial reporting services to learn about the transactions and financial conflicts of its faculty members in order to discharge its fiduciary duty to disclose these transactions to NIH?

Even worse, the American Psychiatric Association has parroted Stanford’s assertion that Dr. Schatzberg made the required disclosures. In an interview with the New York Times, Dr. Nada L. Stotland, president of the psychiatric association, said the group had studied Mr. Grassley’s letter and Stanford’s response and agreed with Stanford. Dr. Schatzberg will take over as president of the association as planned, she said. The association and the University here are being disingenuous – treating an ethical issue as a technical legalism. But even on legally technical grounds their case fails. Is that the standard that Stanford and the APA wish to state for the record?

Once again, it is time for Stanford to get real about the boundary between commerce and academia. And, in view of the unjustified promotion of their commercial interest by Dr. Schatzberg and his corporate associates through academic outlets, it is time for the American Psychiatric Association to grasp the nettle and to reconsider Dr. Schatzberg’s fitness to serve as president in 2009.

Thank You and Good article SCHATZBERG DISCLOSURE this time, hopefully can benefit for you all. see you in other article postings.

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